Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>In this insight, we provide the details of Medtronic's M&amp;A and tender offer for Eoflow. </li>
<li>Currently, Eoflow is trading at 28,050 won which is 6.5% lower than the tender offer price of 30,000 won.</li>
<li>Eoflow's share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the current M&amp;A framework.</li>
</ul>


In this insight, we provide the details of Medtronic's M&amp;A and tender offer for Eoflow. 
Currently, Eoflow is trading at 28,050 won which is 6.5% lower than the tender offer price of 30,000 won.
Eoflow's share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the current M&amp;A framework.


Medtronic's M&A, Tender Offer, and Taking Private of Eoflow

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.</li>
<li>It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.</li>
<li>While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.</li>
</ul>


The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.
It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.
While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.


EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>The three companies we write about this week are <a href="https://www.smartkarma.com/entities/raytheon-technologies-corp" target="_blank" data-smartkarma-citation="entities:6453:1" rel="noopener">Raytheon Technologies (RTX US)</a><a href="https://www.smartkarma.com/entities/beiersdorf-ag" target="_blank" data-smartkarma-citation="entities:21588:1" rel="noopener">Beiersdorf AG (BEI GR)</a> and <a href="https://www.smartkarma.com/entities/king-slide-works-co-ltd" target="_blank" data-smartkarma-citation="entities:7130:1" rel="noopener">King Slide Works (2059 TT)</a> 
</li>
<li>For the twenty-six weeks since inception ended 19 May the combined innovation portfolio was +2.5%, versus DJIA-0.9%, S&amp;P500+5.7%, Nasdaq+13.6%, Russell2000 -4.1%, MSCI-ACWI-ETF+6.9%, S&amp;P midcap 400 -2.2%, all in US$ terms</li>
<li>Small-Cap (+4.1%) versus Russell2000 (-4.1%) and midcap (+1.9%) versus S&amp;P400 (-2.2%) continues to outperform benchmarks, but the omission of mega-tech names has hurt large-cap portfolio (+2.6%) versus S&amp;P500 (+5.7%) . </li>
</ul>


The three companies we write about this week are Raytheon Technologies (RTX US)Beiersdorf AG (BEI GR) and King Slide Works (2059 TT) 

For the twenty-six weeks since inception ended 19 May the combined innovation portfolio was +2.5%, versus DJIA-0.9%, S&amp;P500+5.7%, Nasdaq+13.6%, Russell2000 -4.1%, MSCI-ACWI-ETF+6.9%, S&amp;P midcap 400 -2.2%, all in US$ terms
Small-Cap (+4.1%) versus Russell2000 (-4.1%) and midcap (+1.9%) versus S&amp;P400 (-2.2%) continues to outperform benchmarks, but the omission of mega-tech names has hurt large-cap portfolio (+2.6%) versus S&amp;P500 (+5.7%) . 


The Innovations Portfolios - Week Twenty Six

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

VanEck Gold Miners ETF/USA / Technical Analysis

<ul>
<li>The SPX made a high of 4169 last week, tagging our 4165-4200 resistance range. We still believe 4165-4200 will cap upside in 2023, with a reach to 4300-4325 also possible.</li>
<li>Considering limited upside in both scenarios, and with the seasonably weaker "sell in May and go away" period approaching, we continue to recommend higher allocations to defensives</li>
<li>This includes Utilities (XLU, RYU), Consumer Staples (XLP), Health Care (XLV, PPH), and gold miners (GDX).</li>
</ul>


The SPX made a high of 4169 last week, tagging our 4165-4200 resistance range. We still believe 4165-4200 will cap upside in 2023, with a reach to 4300-4325 also possible.
Considering limited upside in both scenarios, and with the seasonably weaker "sell in May and go away" period approaching, we continue to recommend higher allocations to defensives
This includes Utilities (XLU, RYU), Consumer Staples (XLP), Health Care (XLV, PPH), and gold miners (GDX).


"Sell in May" Another Reason to Be Defensive; Value to Lead?; Buys in Medical Devices, Footwear

<ul>
<li>The three companies we write about this week are <a href="https://www.smartkarma.com/entities/contemporary-amperex-techn-a" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">CATL (A) (300750 CH)</a> , <a href="https://www.smartkarma.com/entities/kimberly-clark-corp" target="_blank" data-smartkarma-citation="entities:2292:1" rel="noopener">Kimberly Clark (KMB US)</a> and <a href="https://www.smartkarma.com/entities/blackberry-ltd" target="_blank" data-smartkarma-citation="entities:25472:1" rel="noopener">BlackBerry Ltd (BB CN)</a> </li>
<li>For the twenty-one weeks since inception ended 14 April the combined innovation portfolio was +3.6%, versus DJIA +0.4%, S&amp;P500 +4.3%, Nasdaq +8.8%, Russell2000 -3.7%, MSCI-ACWI-ETF +6.2%, all in US$ terms</li>
<li>For the same period the small cap innovation portfolio was up +5.9%, the mid cap portfolio was up +4.4% and the large cap portfolio was up +3.4%</li>
</ul>


The three companies we write about this week are CATL (A) (300750 CH) , Kimberly Clark (KMB US) and BlackBerry Ltd (BB CN) 
For the twenty-one weeks since inception ended 14 April the combined innovation portfolio was +3.6%, versus DJIA +0.4%, S&amp;P500 +4.3%, Nasdaq +8.8%, Russell2000 -3.7%, MSCI-ACWI-ETF +6.2%, all in US$ terms
For the same period the small cap innovation portfolio was up +5.9%, the mid cap portfolio was up +4.4% and the large cap portfolio was up +3.4%


The Innovations Portfolios - Week Twenty One

United States

STERIS Public Limited Company operates as a provider of infection prevention and other procedural products and services. The Company offers sterilizers and washers, surgical tables, lights and equipment management systems, and endoscopy accessories. STERIS serves healthcare, pharmaceutical, and medical device industries.

West Pharmaceutical Services, Inc. applies value-added services to the process of bringing new drug therapies and healthcare products to global markets. The Company's technologies include the design and manufacture of packaging components, research and development of drug delivery systems, and contract laboratory services and other services.

West Pharmaceutical Services Inc (WST US)

ResMed Inc. develops, manufactures, and markets medical equipment for the treatment of sleep disordered breathing.  The Company sells diagnostic and treatment devices in various countries through its subsidiaries and independent distributors.

Hologic, Inc. is a developer, manufacturer and supplier of premium diagnostic products, medical imaging systems, and surgical products. The Company's core business units focus on diagnostics, breast health, GYN surgical, and skeletal health.

DexCom Inc. is a medical device company focused on the design and development of continuous glucose monitoring systems for people with diabetes.  The Company has developed a small implantable device that continuously measures glucose levels in subcutaneous tissue just under the skin, and a small external receiver to which the sensor transmits glucose levels at specified intervals.

Abbott Laboratories discovers, develops, manufactures, and sells a broad and diversified line of health care products and services. The Company's products include pharmaceuticals, nutritional, diagnostics, and vascular products. Abbott markets its products worldwide through affiliates and distributors.

Becton, Dickinson and Company is a global medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents used by healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public.

IDEXX Laboratories, Inc. provides diagnostic, detection, and information systems for veterinary, food, and water testing applications. The Company also operates an international network of veterinary reference laboratories. IDEXX offers its products to customers worldwide.

Baxter International Inc. develops, manufactures, and markets products and technologies related to hemophilia, immune disorders, infectious diseases, kidney disease, trauma and other chronic and acute medical conditions. The Company's products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors' offices, and research laboratories.

Globus Medical, Inc. is a medical device company. The Company is focused exclusively on the design, development and commercialization of products that promote healing in patients with spine disorders.  Globus Medical's products fall into innovative fusion or disruptive technologies.

OLYMPUS CORPORATION manufactures optoelectronic products.  The Company's products include cameras, video sets, endoscopes for medicine and industrial use, microscopes, analytical equipment, office communication systems, laseroptical scanners, and ionic printers.

EssilorLuxottica manufactures eyewear. The Company offers sun glasses, lenses, and other eye care products. EssilorLuxottica serves customers worldwide.

Coloplast A/S develops and provides health care products and services. The Company manufactures products for ostomy, incontinence, mastectomy, wound healing, and skin care. Coloplast's research projects are carried out in cooperation with professional caregivers and user groups. The Company sells to health care professionals, dealers, and product users throughout the world.

Terumo Corporation is a manufacturer and supplier of pharmaceuticals and medical tools and equipment. The Company's products include health foods, transfusion and infusion equipment, disposable medical supply, clinical testing systems, artificial organs, and electronic thermometers. Terumo markets the products through its subsidiaries and sales offices in the US, Europe, and Asia.

Hoya Corp manufactures electro-optics products such as mask blanks for semiconductors, photomasks for LCD panels, optical glasses, glass memory disks for HDDs, medical flexible endoscopes, eyeglasses, and contact lenses. The Company also provides information system architecture.

Fisher & Paykel Healthcare Corporation Limited designs, manufactures and markets heated humidification products and systems for use in respiratory care and the treatment of sleep apnea.  The Company also offers patient warming and neonatal care products, including warming products and infant resuscitators.

SYSMEX CORPORATION manufactures reagents and equipment for clinical tests including hematologic (blood) and immune tests. The Company also develops, manufactures, and trades particle analyzers such as blood coagulation analyzer and related software. Manufacturing and sales outside Japan include the United States, EMEA, China and Asia Pacific regions.

BioMerieux designs, develops, manufactures, and markets systems in the field of in vitro diagnostics for medical and industrial applications. The Company is specialized in the diagnosis of infectious diseases and pathologies. BioMerieux is also active in the analysis of food, pharmaceuticals and environmental samples to determine their microbiological quality.

Sartorius Stedim Biotech develops and manufactures laboratory technologies and equipment for the pharma and food industries, as well as for public research institutes and laboratories.

Medtronic, PLC develops therapeutic and diagnostic medical products. The Company's principal products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, heart failure management, heart valve replacement, malignant and non-malignant pain, and movement disorders. Medtronic's products are sold worldwide.

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Medtronic Plc (MDT US)

Medtronic's M&A, Tender Offer, and Taking Private of Eoflow

Eoflow's share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the...

Douglas Kim

EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

This post gives comprehensive information about the tender offer to be made by Medtronic for EOFlow, including a discussion on the cancellation...

Sanghyun Park

The Innovations Portfolios - Week Twenty Six

The small-Cap (+4.1%) and midcap (+1.9%) portfolios continues to outperform respective benchmarks, but the willful omission of mega-tech names has...

Pyari Menon

"Sell in May" Another Reason to Be Defensive; Value to Lead?; Buys in Medical Devices, Footwear

"Sell in May" Another Reason to Be Defensive; Value Poised to Outperform?; Watching Semiconductors $SOXX $XSD and Banks $KRE $KBE for breakage....

Vermilion Research

The Innovations Portfolios - Week Twenty One

For the twenty-one weeks since inception ended 14 April the innovation small cap portfolio was up 5.9%, mid cap portfolio was up 4.4% and the large...

Pyari Menon

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